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DRAFT UNDP Partnerships with the Business Sector Supporting SME Entrepreneurship for Sustainable Development CATEGORIES OF UNDP SUPPORT TO SMEs Activities can be carried out on a national or regional level, with separate initiatives or an integrated approach

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Supporting SME Entrepreneurship for Sustainable Development

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categories of undp support to smes
  • Activities can be carried out on a national or regional level, with separate initiatives or an integrated approach
  • Non-financial business development services:
    • Business centres
    • Business incubators
    • Supply chain initiatives supporting business linkages
  • Microfinance
  • Direct support to entre-preneurs
  • Enabling actions
  • Enabling actions to support healthy business environment – creating enabling policy environment

GSB initiative

  • Catalyzing investments
  • Catalyzing and driving integration of investments in SME local country development
a few examples of undp support to smes
  • Atyrau Business Advisory Centre in Kazakhstan
  • Supply Chain Project in Mexico
  • “Enterprise Africa”
  • Angola Enterprise Programme
  • “Job Opportunities in Business Support” Project in Bulgaria
  • Network of Small Business Development Centres in Egypt
kazakhstan business advisory centre and micro credit programme through corporate partnership

Results achieved:

  • Hundreds of local firms counselled
  • 280 business plans created, 25% financed
  • $2 million+ disbursed in loans
  • 530+ jobs created
  • 1000+ on-going credit clients (in 2002)
  • Role for private sector:
  • Financial support
  • Active role in developing model and monitoring implementation
  • Key lessons learned:
  • Convergence of project goals and partners’ interests is key
  • Long-term perspective is critical
  • Need to include local government to ensure support
  • Centre should be encouraged to generate own income
  • Description of initiative:
  • Atyrau Business Advisory Centre and Micro-credit Programme, providing business training and lines of credit to SMEs
  • Location:
  • Kazakhstan
  • Partners

Local government




  • Role
  • Location for incubator
  • Project management and administration
  • Tested project model for SME development
  • Financial support
  • Credibility, relationships with local governments, trusted link to local community
  • Financial support (more than $900k overall)
  • Active participation in project formulation and monitoring
  • Participation in and support of local events (graduations etc)
  • Financial support ($125k over 2nd and 3rd phase)
  • Benefits
  • Realization of UNDP mandate to help countries promote sustainable human development, and alignment with MDG1 (Eradicate Extreme Poverty)
  • Government obligation fulfilled
  • Reputation and brand image enhanced
  • New vendors gained through enterprise development programme (38% of goods and services now procured locally)
  • Guarantee of reliable utilization of community development budget
  • Enhanced reputation
  • Long-term commercial advantage – early positioning of brand with local enterprises
  • Increased employment opportunities and higher local living standards
  • Main phases and activities
  • Business incubator
  • Establishment of business development centre
  • Expansion to include pilot micro-credit scheme
  • Future plans
  • UNDP gets support of local governor
  • 4 national counsellors recruited and trained
  • Services provided: seminars, trainings and workshops as well as drop-in services
  • Non-collateral peer lending offered to young adults and unemployed (all graduates of centre’s training seminar)
  • Involvement of Citibank
  • Provision of space (and business supplies) and professional services (secretary, accountant, lawyer) to start-ups
  • Micro-credit scheme to be registered with government as an independent micro-credit organisation

* UN Volunteers also involved

mexico development of supplier capacities and business linkages

Results achieved:

  • Project currently entering actual roll-out phase
  • Role for private sector:
  • Development of methodology
  • Active participation through own business linkages with SME suppliers
  • Key lessons learned:
  • Variety of partners needed to achieve results (large private companies, entrepreneur associations, governmental backing)
  • Importance of institutional support
  • Description of initiative:
  • “Mexico Supply Chain Project: Suppliers Training and Promotion of Chains” - development of network of Supply Chain Consultants, to be followed with provision of technical assistance to large enterprises with clusters of SME suppliers
  • Location:
  • Mexico
  • Partners*
  • Private partners: Bimbo, Cementos Apasco, Firestone, 3M, Corporacion Internacional del Color, Cerveceria Cuauhtemoc Moctezuma


  • Canacintra (National Association of Manufacturers)
  • Role
  • Development of approach, content and scope through technical assistance since 1998
  • Financial sponsor
  • Monitoring of methodology, quality control
  • Testing of developed methodology with own groups of SME suppliers
  • Integrating SMEs into supply chain
  • Contribution to promotion through local network of associations
  • Benefits
  • Realization of UNDP mandateto help countries promote sustainable development and alleviate poverty
  • Productivity increases, improvements in purchasing volumes, optimized delivery, quality improvements, timely payments
  • Higher standards among SME suppliers benefiting larger manufacturers
  • Main phases and activities
  • Certification of Supply Chain Consultants
  • Development of supplier development methodology
  • Second phase
  • Assembly of best practices
  • Pilot
  • Gathering of national and international best practices on how to develop providers (1998-2002)
  • Development of methodology and testing in 6 large companies (see above) and 34 SMEs (1998-2002)
  • Finalization of training tools (CD-rom supplier development manual for virtual training) (2003-2004)
  • Virtual training of 112 consultants from 22 different states of Mexico (July-Nov 2003)
  • Certification of consultants – endorsed by Canacintra, NAFIN, Ministry of Economy and UNDP
  • Pilot diagnosis performed in 112 SMEs
  • Practical application of methodology – consultants provide technical assistance to 24 leading enterprises along with their respective SMEs, in total more than 260 enterprises will be covered
  • Phase planned to last 10 months beginning Feb 2004

* Ministry of Economy main financial sponsor

** NAFIN (Nacional Financiera, Mexico’s largest government-controlled development bank) as executing agency

enterprise africa replication of proven enterprise development model

Results achieved:

  • Over 4300 entrepreneurs benefited from EA skills development services
  • 750+ enterprises restructured and expanded
  • 725+ business plans prepared and access to credit facilitated
  • Accounting and financial management systems developed for 250+ SMEs
  • Innovative programmes/ services introduced
  • Role for private sector:
  • Financial donors
  • Involvement in Executive Placement Scheme
  • Design of key policies, marketing strategy, management systems
  • Key lessons learned:
  • Ability to adapt programme to local conditions is critical
  • Key success factors include: identification and selection of local entrepreneurs with the highest potential for success; establishing strategic partnerships to reinforce UNDP’s delivery capacity
  • Key challenges/risks include long gestation period for mobilizing resources, thus delaying roll-out
  • Pan-African not-for-profit consortium dedicated to establishing national programmes for entrepreneurship and enterprise development in Africa; Builds on Empretec model: integrated capacity-building programme promoting the creation of sustainable SME support structures to help promising entrepreneurs build innovative and internationally competitive SMEs
  • Description of initiative:
  • Location:
  • 14 countries*
  • 20+ donors (MNC, private foundations, business associations, multilateral and bilateral donors)
  • National counterparts
  • Partners


  • Role
  • Take-over of model
  • Requires excellent network of public and private sector contacts, profound under-standing of SME constraints in given country
  • National Advisory Board set up to establish policy and oversee implementation
  • Installed the Empretec model in 14 African countries through the “Enterprise Africa” initiative
  • Financial sponsors
  • Design of key policies, strategies, systems
  • Advisory Board role
  • Benefits
  • Realization of UNDP mandate to help countries promote sustainable human development, and alignment with MDG1 (Eradicate Extreme Poverty)
  • Improvements in general private sector environment
  • More reliable SME input suppliers
  • Expanded customer base for goods and services
  • Enhanced job creation, income generation, export development, skill levels of population
  • Direct support of entrepreneurs

Future plans:

  • Roll-out to 11 other countries
  • Introduction of new products/services: e.g. Corporate Village Enterprise model (COVE)
  • Introduction of Export Round-table Initiative
  • Introduction of upstream policy-related services
  • Promotion of regional economic integration
  • Main phases and activities
  • Follow-up support
  • ETW
  • Two-week Entrepreneurship Training Workshop held for successful applicants (local entrepreneurs)
  • Differs per country, but typical range of fee-based services includes: diagnostic studies, business plan preparation, business counselling and advisory services, industrial consultancy, accounting assistance, credit sourcing
  • Enterprise Africa set-up
  • Origins
  • Roll-out in each country follows standard process
  • Programme becomes fully operational and sustainable in given country within 3-5 years
  • Empretec model (coordinated internationally by UNCTAD) rolled out successfully in 27 countries
  • Regional programmes instituted (other examples: “Med 2000”, IDB Partnership for Central America and Panama)
  • Building capacity within institutional context
  • Transfer of methodology
  • Capacity strengthening
  • Assistance in strengthening operations and service structure of local institution
  • To ensure continuation of training and follow-up support, transfer of methodology to local institution

* Botswana, Benin, Cameroun, Congo DRC, Ethiopia, Ghana, Mauritius, Mozambique, Namibia, Nigeria, Senegal, South Africa, Uganda, Zimbabwe

angola public private partnership angola enterprise fund

Results achieved:

  • Project launched at end 2002, results not known prior to review
  • Targets for 18-month review: functional research unit, micro-finance unit in Central bank, increase in number of SMEs with access to credit (from 8 to 20 thousand by June 2005), 1000 clients of vocational courses, 1000 clients of 2 established Business Centres, 200 microentrepreneurs taught business skills by selected NGO, support to 30 enterprises from 2 incubators
  • Key lessons learned:
  • Avoid duplication of effort – risk if vast network of NGOs, donors etc working in given country
  • Watch out for little coordination of activities and proliferation of opportunity-driven activities (as opposed to strategically planned)
  • Role for private sector:
  • Financial sponsor
  • Organizational responsibility
  • Description of initiative:
  • Establishment of Angola Enterprise Fund as public-private partnership for promotion of SME development in Angola and local capacity-building; key components: business support centres, business incubators, microfinance and vocational training
  • Location:
  • Angola
  • Partners
  • Government of Angola



  • Role
  • Co-governor of the AEF – role in Management Committee and Advisory Panel
  • Financial co-sponsor – target contribution of $1 million
  • Project formulation
  • Project management/ coordination
  • Technical capacity
  • Financial sponsor – up to $5 million, with the intent to mobilize additional funding from other private donors towards initial target of $10 million
  • Organizational capacity to integrate expertise of international public and private sector organizations
  • Benefits
  • Reduction of high cost of domestic production (reduced dependency on imports)
  • Increased employment opportunities
  • Higher incomes
  • Realization of UNDP mandate to help countries promote sustainable human development
  • Alignment with MDG1 (Eradicate Extreme Poverty)
  • Proven model allowing ChevronTexaco to fulfill mission of its $50 million Angola Partnership Initiative, helping Angola with post-conflict reconstruction
  • Main phases and activities
  • Start-up
  • Launch of pilot projects
  • Expansion

18-month review

  • Timing: 6-12 months
  • Hiring and training of project staff
  • Selection of local institute to establish research unit to build SME sector knowledge base
  • Launch of national market studies to assess a) capacity of vocational training providers and b) demand for business development services
  • Negotiations to set up microfinance development unit together with Banco Nacional de Angola
  • Timing: 6 months (approx)
  • Launch of 4 pilot projects: 2 Business Centres, local NGO to pilot downscaling business services to micro-entrepreneurs, and incubator to support young graduate enterprises
  • Launch of vocational training pilots to assess different delivery mechanisms
  • Launch of micro-finance pilots
  • Based on availability of resources, replication and increase of successful pilot projects throughout Angola
bulgaria business advisory centre and business incubators

Results achieved:

  • Over 2000-2003, JOBS has created approx. 8000 long-term jobs; trained 7000+ entrepreneurs/ companies
  • Financial leasing scheme has disbursed $1.5 million to almost 300 companies, including 40% start-ups
  • Role for private sector:
  • Support of local economic development projects
  • Key lessons learned:
  • Business Centre model must be adapted to local realities
  • Self-sustainability needs to be focused on from the start, but will take time to achieve
  • Selection of priority sectors enables focus
  • “Job Opportunities through Business Support” (JOBS) - network of 24 Business Centres, including 11 Business Incubators and 3 Business Information Centres, aimed at stimulation and creation of SMEs
  • Description of initiative:
  • Location:
  • Bulgaria
  • Partners


  • Ministry of Labour and Social Policy
  • Role
  • Financial donor
  • Development and testing of concept
  • Support in roll-out
  • Financial donor* (96% of funding, total funding close to $15 million)
  • Implementation responsibility
  • Benefits
  • Realization of UNDP mandateto help countries promote sustainable human development
  • Enhanced economic development of regions with high unemployment levels – strengthened and developed local businesses
  • Main phases and activities
  • Future plans
  • Geographic expansion
  • Roll-out
  • Start-up
  • Launched in Oct 2000
  • Based on previous experience of UNDP/ILO testing different tools for local SME promotion in remote communities over 1995-2000, resulting in set-up of 5 Business Centres
  • Development of Business Incubators, offering premises for rent at below-market rates, shared business services, start-up and business planning support and training
  • Strategic focus on 6 priority sectors (apparel and textile, wood processing and furniture, handicrafts, herbs and spices, tourism, alternative agriculture)
  • Set-up of IT Centres in each Business Centre, providing internet access, developing computer skills and supporting e-commerce
  • Financial leasing scheme – for maximum of $10,000, repayment period up to 36 months
  • May 2003
  • 11 more Business Centres, achieving national coverage
  • Set-up of National Business Development Network (NBDN) associating all JOBS BIs and BCs – exit strategy for JOBS Project, support for entrepreneurship promotion policies
  • NBDN to offer support for private sector to prepare for EU accession
  • Planned increased focus on specific target groups (e.g. military officers pending separation)

* Other financial donors include governments of Norway, Belgium and the Municipality of Torrevieja-Spain

roles for large companies in supporting smes



  • Support for programme/project allowing company to fulfill CSR mission or demonstrate commitment to the development of country in which it is operating
  • Financial sponsor
  • Involvement in preparation of concept, for example development of methodology
  • Programme/ project design
  • Application of own resources and management attention to ensure adequate implementation process
  • Monitoring and execution
  • Support for initiative by bringing in other private companies – for example to provide financial support or other resources
  • Support by leveraging existing media contacts
  • Support in awareness raising initiatives or participation in discussions with policy makers
  • Promotion/ convening stakeholders
  • Transfer of expertise to SMEs
  • Dedication of resources to build skill and knowledge base of SMEs through methods such as mentoring, coaching or training sessions – for instance suppliers to ensure timely and high quality deliveries
  • Access to finance/ credit guarantees
  • For example, providing guarantees to enable small suppliers to improve performance by equipment purchase
  • Integration of business partners/ suppliers etc.
  • Development of linkages typically will start with non-core product and service supplies, and transition to suppliers more critical to the company’s core production processes
  • Development of new commercial business models/ Provider of new business ideas
  • Development of initiative which will support core business needs, for example enabling access to new markets. Development of new appropriate and affordable products and services for developing countries


  • To have impact, interventions must be of long enough duration (5-10 years) to establish

credibility and strategic partnerships with key policy makers and private sector leaders

  • Make use of qualified local staff (provide training if necessary)
  • Select counterpart organizations and local service providers in a transparent way
  • Identify key champions in the public and private sectors to support, lead, drive
  • Use an integrated approach for high impact (combine different services, including

non-financial an finance)

  • Direct firm-level assistance is the quickest and best approach in conflict areas, or where

government is weak / ineffective

  • Willingness of enterprise customers to pay fee for services is crucial for development of

appropriate services that help improve productivity

  • Governments and donors are bureaucrats that do not understand commercial incentives well –

channeling enterprise assistance through purely public agencies normally does not work

(public-private cooperation is sometimes effective)

  • Successful projects broker commercial relationships between local service providers and

client enterprises